Why I don't source deals from Georgia's Super Tuesday auctions

Question

I get asked a lot by investors whether or not they should be showing up to the courthouse steps on the first Tuesday of the month to pick up foreclosure or tax lien deals. In Georgia, this is called Super Tuesday. My answer, I don't source deals that way, and here's why:

Foreclosures

• - You're bidding sight unseen for the most part. Most properties are still occupied, so you're limited to looks from online photos or a drive by if you're lucky. You don't get any interior inspections to evaluate the condition of the property before purchasing.
• - There are no finance contingencies or due diligence periods after winning a bid. Therefore, you're committed to a property with far less certainty than if you were to buy off-market.
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- You're bidding sight unseen for the most part. Most properties are still occupied, so you're limited to looks from online photos or a drive by if you're lucky. You don't get any interior inspections to evaluate the condition of the property before purchasing.

- There are no finance contingencies or due diligence periods after winning a bid. Therefore, you're committed to a property with far less certainty than if you were to buy off-market.

Tax Liens

• - You're not even buying the property, you're buying the lien with a hope of eventually acquiring the property if the owner doesn't redeem. This process typically takes around a year.
• - The waiting period for redemption of the property ties up your capital with no guarantee that you'll own the property in the end. You may even end up in a lengthy legal process to take possession.
• - While a tax lien is a valid passive, long-term play, it is not ideal if you're trying to grow a repeatable real estate investment portfolio quickly.
•

- You're not even buying the property, you're buying the lien with a hope of eventually acquiring the property if the owner doesn't redeem. This process typically takes around a year.

- The waiting period for redemption of the property ties up your capital with no guarantee that you'll own the property in the end. You may even end up in a lengthy legal process to take possession.

- While a tax lien is a valid passive, long-term play, it is not ideal if you're trying to grow a repeatable real estate investment portfolio quickly.

These are reasons I focus on off-market or direct-to-seller acquisitions instead. With these types of deals, I can better control the timeline, walk properties before getting them under contract and structure deals that work for both the buyer and the seller.

I'm curious, are there any investors out there that have had success from acquiring properties through the auction?

Chris Seveney · Answer

we buy non performing notes, so many times we may take back a property site unseen. I also know people who do the tax liens and are happy getting their 20% or whatever it is over the course of the year because in most instances the homeowner (or lender) will redeem.

I am not a fan of tax liens, reason being i find it boring, but everyone carves out a niche and if you focus on a niche and get really good at it, it can reap big rewards.